The Japanese stock market is on a short-term rise due to the yen’s rise. The economic recession will become more serious in the future.

The Japanese stock market is on a short-term rise due to the yen’s rise. The economic recession will become more serious in the future.
The current Nikkei is like the Turkish lira stock market. Rather than fundamentals, it just turns the currency into a tissue mop, which causes the stock market to rise due to the currency’s depreciation.
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How does BTFP intensify inflation
Raising interest rates again, raising prices, triggering a high-pressure economy?
(It’s staggered if it’s creaky, and of course, I’ll bite my mouth like yesterday’s Goolsbee and Yellen so it doesn’t look like that.)

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The Federal Reserve’s emergency phasing out (BTFP) began a year ago as a move to negate losses on banks’ underwater assets.
But the Federal Reserve wants to secretly develop the latest version of key structural reform mechanisms, rather than simply starting to abolish them.

In March 2023, the repercussions of COVID-19 had left banks and currency leaders struggling. Federal Reserve officials and Silicon Valley Bank (SVB) executives unable to weather the crisis and ended up with huge amounts of escapist deposits.

After declaring an emergency restructuring, SVB drew in billions of dollars in uninsured bank deposits with concentrated venture investors. This was expected to result in an additional $100 billion in deposit outflows due to leave SVB via social media. In preparation, SVB had to sell devalued bonds to secure reserves.

SVB management realized this and contacted regulators to force the bank to close. However, news of the bankruptcy of Silvergate Bank and the collapse of SVB raised concerns about the regional banking system. This required huge intervention.

On March 12, monetary leaders announced additional measures to calm financial turmoil and address bank insolvency. This was the introduction of the Banking Period Funding Program (BTFP). The BTFP effectively mitigated interest rate risks for banks by allowing banks and other deposit institutions to borrow cash equal to the face value of securities.

The measure only applied to the bank’s portfolio, but the U.S. central bank signaled to market players that it was willing to mitigate duration risks to maintain stability. Aside from the death of Credit Suisse, the move sparked optimism and prompted a rally in risky assets.

Market participants all assessed the strength of the Fed’s intervention accurately (Hyper Q.E),
All banks facing liquidity squeeze, with the exception of a few insolvent banks, have requested to be backed by BTFP.
BTFP loan growth slows months later, rising to around $107 billion..

BTFP is known as the “last resort lender” system, and it was recently reported that the Fed and other central banks were preparing an updated version to fix flaws in the system. This updated version aims to improve the underlying structural mechanism. As a result, the Fed plans to suspend new loans to BTFP facilities due on March 11, 2024, and raise the minimum borrowing rate to the same level as the IORB.

To get a BTFP loan, the institution requesting the funds must provide proof of sound financial position. However, until the BTFP expires (almost) all banks remained intact, a result of confirming that the banks that requested the “emergency” funds by allowing the BTFP to expire remained intact.

Also, banks are likely to have taken immediate action to increase their resilience after the situation subsides. By making up for lost deposits by attracting deposits, increasing reserves, and raising capital levels, banks have set up safeguards to prepare for future pressures.

While arbitrage may have been wiped out by the Fed’s latest changes, BTFP and its plumbing remain in place, allowing it to continue taking out new loans through March 11.